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Renewables to make up over half of Canadian capacity additions through 2040

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Renewables to make up over half of Canadian capacity additions through 2040

Canada's annual electricity demand is expected to jump 19% above 2015 levels by 2040, an increase of 386 terawatt-hours. And the country's National Energy Board anticipates that any associated capacity gap will be filled with more renewable and natural gas-fired generation.

About 14.1 GW of existing capacity — made up of approximately 8.5 GW of coal, 3.2 GW of nuclear, 1.6 GW of natural gas and 0.7 GW of oil-fired generation — is expected to retire before 2040. Wind, solar, hydro and biomass will account for about 58% of the new capacity additions, which the NEB said will make up 26.5 GW of the 45.8 GW required. Net additions to generating capacity over the projection period amount to 31.7 GW, according to the NEB.

Nonhydro renewables will more than double over the period, increasing from 15 GW to 33 GW. That expansion is attributed to substantial cost declines, which are expected to continue to shape Canada's renewable power landscape, the NEB said. Coal's share of capacity will drop from 7% in 2015 to 1% in 2040 as a result of policies intended to phase out the burning of coal for electricity. The NEB offered the outlook Dec. 8 as a market snapshot based on data compiled from its annual energy market assessment report, which was issued in October.

Canada's first ministers met in Ottawa recently to discuss new targets for reducing the country's greenhouse gas emissions. The ministers, with the exception of Saskatchewan Premier Brad Wall, released the results of those meetings, the Pan-Canadian Framework on Clean Growth and Climate Change, on Dec. 9. The overall goal is to meet or exceed a 30% reduction in greenhouse gases below 2005 levels by 2030. As part of those efforts, Prime Minister Justin Trudeau has mandated the closure of coal-fired generators across the country and has been working out compromises and plans with individual provinces to meet that directive. New Brunswick most recently released the first steps of its plan to phase out coal.

The Pan-Canadian Framework sets out a path to, among other things, develop new energy efficiency building codes; deploy new vehicle charging stations to support nonemitting vehicles; expand clean energy systems such as smart grid projects to phase out the reliance on coal and make more efficient use of existing power supplies; and reduce methane emissions from the oil and gas sector.

Trudeau's government will also invest in green infrastructure, public transportation, and clean energy technology and innovation. This investment includes helping indigenous peoples and those in remote and northern areas ease off fossil fuels.

The first ministers, representing each participating province, will have to report back on their progress every year and develop plans to implement a nationwide carbon pricing program by 2022 to provide certainty on the path forward. An interim report will be released in 2020.

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